Ukraine to return gas to Rosukrenergo

Ukraine will return 1.3 billion cubic meters of Russian natural gas to the Swiss-registered company Rosukrenergo, according to Ukrainian Fuel and Energy Minister Yuri Prodan.

In March Naftogas admitted siphoning gas belonging to Rosukrenergo and storing it underground. According to Ukraine's energy minister, the gas which is to be returned comes from Central Asia and is part of this year's allocation.

Russian gas monopoly Gazprom buys gas from Central Asia and resells it to Ukraine via RosUkrEnergo, which is the exclusive gas exporter to Ukraine. It charges just over $179 per thousand cubic meters.

A source at Rosukrenergo said the company had no information on Ukraine's decision to return some of the gas.

Vitaly Ermakov, Director of Research at CERA highlights the move comes ahead of negotiations over gas price for Ukraine for 2009.

Central Asian producers demanded a much higher price for their gas, from Russia, and this gas, the bulk of it, is being passed on to Ukraine. So the increasing price of central Asian gas means an automatic increase in the price of gas for Ukraine. Gazproms position has been very firm, they have said basically that ‘we need to receive all backpayments for the current year, and all the debt that has accumulated so far before we can decide what the price for the next year for Ukraine is going to be.